ARWP 4 th Annual Meeting on Private Sector Issues Infrastructure & Services Investment

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Oman Telecommunications Company

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ARWP 4th Annual Meeting

on

Private Sector Issues

Infrastructure & Services Investment

Tunis Meeting

1-2 December 2004

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AGENDA

Introduction Old Action Items Infrastructure Connectivity between Arab Countries Call Centre Business in Arab Countries Voice Over IP Policies Initiatives for increasing Arabic Content Investment

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Old Action points review:

• Construct a web site for ITU-Arab private sector: – Mr. Atef advised that the site is already developed– He is to forward the web site to the groups in order to get their

feedback.• Encourage business opportunities for Arab private

sector communication companies: – We agreed that this could be achieved through gathering new

tenders electronic information & publish it in the web site for ITU-Arab private sector.

– The gathering of the tender’s information through a questionnaire to all Arab telecoms is to be coordinated by ITU.

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Arab World Connectivity

• The objective of this initiative is to insure the Arab countries infrastructure capability of having the Inter-Arab countries interconnect traffic for voice & data routed within the Arab countries infrastructure.

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Means of Connectivity

•Satellite (Limited BW, Expensive, Transmission Delay)

•Fiber Optic Submarine (No BW Constraint, Cost Effective, Global/Regional Connectivity)

•Fiber Optic Terrestrial (No BW Constraint, Cost Effective, Limited Participants and Coverage)

•Fiber Over Power Grid (Limited to SCADA use only, Study needed to explore other uses, Cost Effective)

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Fiber Optic (Submarine)

[Source: ITU Arab Book 2004]

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Fiber Optic (Submarine)

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Fiber Optic (Terrestrial)

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SEA-ME_WE 2

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Oman Connectivity

PLANNED CAPACITY

• Omantel is in the process of acquiring capacity in the FALCON project of FLAG expected to be

operational by the end of 2005.

• It will provide an additional capacity of 16 STM- 1’s across the globe

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Recommendations:

• Arab Region is underserved and needs additional capacity of fiber optic network

• The total requirement of each member country be compiled (15 year projection) and conceptual/definitive plans developed

• Expertise from ITU be sought

• Source of funds needed for implementation be explored and arranged

• Use of Fiber over the Power Grid be studied and feasibility prepared.

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Call Center Business

The need for Outsourcing:

• As banking, information technology, and telecommunication businesses growing and competing to provide more innovative services in the middle east, their ability to cope with their diverse activities is reducing.

• Outsourcing their non core activities to contact centers / BPO (Business Process Outsourcing) is a business opportunity for the region to achieve organizational efficiency and promote the Telecommunication and IT sectors.

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Call Center Business

Outsourcing benefits to Contact Center/BPO:

• No capital investment for infrastructure required.• Expertise and experience with other clients in similar business

lines. • Reduced human resource cost. • Flexibility to scale up and down business requirements. • Can easily exit from relationship if not satisfied and move to

another. • Clear relationship with BPO based on quality and performance.• Customized solutions ensure data security and safety.• Improved productivity by focusing on core business.

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Disadvantages of not Outsourcing

• Build expertise from scratch by hiring or redeploying resources.

• Lower competitive edge by have a higher unit costs. • High capital investment and human resource cost as payback usually

from 3 to 5 years.

• Unable to benefit from economies of scale.

• Higher cost with lower quality. • If not satisfied with your in sourced service, difficult exit without

incurring high costs.

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Business Projections for AsiaContact Center Seats

Country 2003 2004Australia 1,35,000 1,46,000India 96,000 1,58,000China 38,000 54,000Philippiness 20,000 40,000New Zealand 12,000 13,500Thailand 11,000 13,000Singapore 10,000 10,100Hong Kong 10,000 10,700Total 3,32,000 4,45,300Source: Gartner

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Model for Arabian Regional countries to emulateBPO HR revenue forecast (Asia Pacific)

HR Activity Revenue (in million $)Payroll services 761.2Benefits administration 535.65Education and training 555.99Recruiting and staffing 347.98Personnel administration 167.16Other HR functions 191.97Total 2,560.00Source: Gartner

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Leading Contact Centers/BPOs

Contact Center/BPO Specialization No. Seats Key CustomersI Touch Point Enhanced Directory Service / Collections 550 U.S companies247Customer.com Customer Care 3,500 10 Fortune 500 companies24X7 Linechat Tecxhnical Support / telemarketing 1,200 U.S & U.K companiesAllsec Tech Email / inbound & outbound voice 1,400 Form & DellDaksh e Services Email / chat / technical support 5,000 Yahoo & AmazonICICI One Source Customer Care 4,000 Virgin Atlantic AirlineSource: BPO India Organization

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Oman experience (Infoline)

• A shared vision between Omantel and private sector to provide world class outsourced contact center solutions.

• Omantel/PEIE/BCT partnership provides contact center solutions using Cisco Hosted IPCC technology.

• Based in the Knowledge Oasis Muscat, Sultanate of Oman, with 300 seating capacity.

• Provides state of the art technology with well trained bilingual, Arabic & English speaking, workforce

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• Gulf Air is the first customer.

• Gulf Air started with 50 seating capacity handling their reservation calls from Oman only in year 2003.

• Today they have 100 seat handling calls from GCC countries, India, UK, and Australia .

Oman experience (Infoline)

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Summary

• As the region is emerging more and more into the global economy associated with higher operating cost, it is time to benefit from the economy of scales to outsource non core activities by promoting initiatives of BPOs.

• BPO activities therefore will further benefit communication and IT sectors.

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Voice over IP

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Global VOIP Market Development

• USA:– The FCC has taken a competitive, market based approach to the Internet Services. – While the basic telephone services are regulated, data services are not regulated in

the United States.– This has resulted in the phenomenal growth of Internet services including Voice over

Internet (VoN). – The companies that offer data services do not pay any access charge to subsidize the

local telephone companies. They also do not contribute to the universal service fund. – Also IP telephony provides alternate calling options in markets that otherwise do not

have any competition.

• European Union:– The Regulatory framework in the European Union aims to be technology neutral and

does not distinguish between the different technologies that communications providers use to deliver their services.

– In UK, The Regulatory Authority Office of Communications (Ofcom) has recently published its directives on VOIP.

– The Communications Act establishes the new general authorization regime, which is a framework under which licenses are abolished and prior authorization or permission is not required from Ofcom before companies are able to provide electronic communications networks and services.

– VoIP providers are required to conform to the General conditions of Entitlement specified by Ofcom.

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• ITU: – ITU-T Study Group 2 is paying special attention to the Quality of

Service (QOS) standards for VOIP and recommendations of the ITU are available on this subject.

– Voice Quality and QOS are critical for the success of any VOIP service.

– ITU had initially produced the H.323 series of recommendations which have been widely accepted in the field of IP Telephony.

– ITU jointly with IETF has produced the H.248/Megaco protocol for controlling the media gateways that can pass voice, video, facsimile, and data traffic between PSTN and IP based networks. ITU-T Study Group 2 (SG2) is currently studying the options whereby users in IP address-based networks can be accessed from /to PSTN users.


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Asian Market :• China

VoIP was opened up in China in the year 2000 and has become the fastest growing service in China’s entire telecom industry, with some analysts forecasting it will capture up to 30% of China’s long-distance market shortly. A year after the VoIP experiment started, the authority designated VOIP as a normal service.

• SINGAPORE:– In Singapore, VOIP was liberalized in the year 2000 and the VoIP market is growing very fast.

The savings in the IDD rates for consumers are substantial. – 20% of all outgoing traffic in Singapore is VoIP compared to 1 to 2 percent in other countries.– Singtel v019 service is offered using IP Technology and allows very cheap calls to more than

240 international destinations.– The calls could be made from any phone line, Phone Net, ISDN and Mobile service.

• INDIA:In India, the Telecom Regulatory body opened up Internet Telephony in the year 2002. As per this notification the scope of the service was for :

– PC-to PC– PC to Phone– IP based H.323 /SIP Terminals employing addressing scheme of “IANA”

Tariff:Toll quality voice - same as that of normal telephone serviceBelow toll quality - lower.


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ARAB/ GCC Countries:• At present, VoIP is not legal in most of the regional

countries except in the case of Kuwait . • Regional countries are taking steps to gear

themselves up to profit from the impending deregulation in Voice Over IP market.

• It has not been very effective to control the illegal provisions by third party providers and therefore the incumbent telecom providers are preparing themselves to provide these services.


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• Omantel was awarded a contract to implement IDC services at Knowledge Oasis Muscat (KOM) in September 2003. KOM is a Technology Park located in Muscat. IP telephony is one of many services being offered at KOM.

• IP telephony project at KOM was a success story for Omantel. It incorporated most of PSTN functionality including extension Mobility.

• One of the major customers (Gulf Air) at KOM Call Center has all of its ticket reservations made on VOIP.

• The traffic for the Gulf Air comes to Oman from major countries such as UK, Singapore and Bahrain.

IP Telephony in Oman

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• Technology: Flexibility in services

• Opportunity: Combining voice and data on the same network, VoIP and other cost-cutting measures can help give the Arab region a competitive advantage in providing services at a reasonable cost.

• Challenge: Regulations

VOIP- Technology, Opportunity, Challenge

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Various researchers show:

• Significant Growth of VOIP in Europe, Middle East and Africa (EMEA).

• Wholesale VOIP traffic exceeding 50 Billion minutes by 2009. • The retail Voice traffic in excess of 1,550 billion minutes.

Recommendations

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• In light of market potential, a recommendation can be made for the creation of an independent focused group in the Arab region to study and leverage upon technologies such as VOIP.

• It is recommended that the group work with a consultant and an ITU Study Group to look at the technology, market opportunities, regulatory issues and governmental concerns.

Recommendation

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Initiatives for increasing Arabic Content

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Arabic Initiatives for increasing Arabic Content

• ITU Arab Region Internet & Telecom Summit (OMAN) held in 2001, the need for increased usage and training was stressed for promotion of Arabic Content.

• Expert Group Meeting on Promotion of Digital Arabic content (DAC) was hosted at Beirut during 2003, under auspices of World Summit on Information Society (WSIS) endorsed by UN and organized by ITU

• Within the above framework, The World Summit Award (WSA) initiated to help move towards a common global vision on the Information Society.

• Number of Regional content providers tied up with Mobile/Internet Service Providers to deliver Arabic content.

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Telecom Services For Delivery of Content

• Internet / Broadband Technologies:

• e-learning, e-government, e-health, e-business, e-entertainment • In the long term, planning for streaming videos using Set top Box

Telephone Services:IVR Audiotext Service

• Mobile Services:• Widespread launch of GPRS and MMS and more recently 3G• Speed of introduction of Arabic content help adoption of MMS• ARABIC offerings:

– News, Jokes, Sports, Entertainment using SMS Content– SMS Infotainment Service to deliver Arabic Content– WAP Push Magazine – Mobile Portal

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Strategies for Content Provision

Content Provision Value Chain& Positions application provider can adopt

Content Provider Aggregator Application Developer

Application Provider

Portal Operators

Developer and Originator

Aggregates Content

From many Providers

Aggregates Application& Content for Portals

Branding

Develops application/content

Listener BrandLeader

Sub Contractor

Brand borrower

End user Brand

Knowledgeof end-userbrand

Extensive

Limited

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Regional Content Provider Offerings

Internet content Delivery:Mostly based on news/media/entertainment

(Albawa,Planet Arabia,AME Info etc.) IVR

Call Group, Media Phone are providing Audio Text contentMobile Content:

• Info2Cell:Arabic Content from MMS Breaking News, MMS Greetings Cards, MMS Horoscopes etc to all regional Providers

• Ducont: Based in Dubai, Delivers SMS based content such as breaking

news, weather, infotainment.

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Internet as a medium for Content Delivery

• Several Arabic Web Portals are now serving the needs of Internet.

• Omantel offers all support for creation of Web sites including Web Hosting.

• New broadband technologies for delivery using DSL technologies and Set top boxes are evolving.

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Investment

• The objective of this initiative is to encourage investment within the Arabic countries through strategic alliances.

• Encourage Arabic Consortiums in bedding for new licenses

• Encourage strategic alliances between Arab Operators.

• Encourage use low cost model operation for the telecom sector.

– MobiNil as a case for the application of the low vost model.

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Steps to increase digital content on Arab Internet sites

• Legislation and execution of laws on protection of intellectual rights required.

• Technological Incubators to be formed for content-making companies.

• Digitalization of National Libraries universities, state institutions required.

• Internet Applications to be Arabized.

• Arab University students should have access to academic studies on the Internet.

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Mobile Content Delivery

• Mobile phone as a popular tool for receiving content owing to its portability and anytime features.

• SMS is probably the most popular form of Content delivery for Mobile terminals.

• New Generation handsets/PDAs complimenting the growth of Content delivery.

• Omantel introduced a Mobile Internet Portal to tap the vast potential of Mobile internet access using GPRS.

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Different Applications for delivery using Mobile data

services Key considerations for delivery of content using mobile data

services

Applications

Person To Person

Person to Machine

Machine to person

Machine to Machine

Note:

Market segmentationand categorization of applications is vital foreffective business development

Examples:P2P- Text,Photo MessagingP2M- Pull services IVR, Voting, CompetitionM2P-Wireless MarketingM2M- Cashless Payments

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Vision for Future

• Telecom Companies to work in partnership with regional Content providers (for example on revenue sharing basis) for delivery of Arabic Content.

• Plan to deliver advanced services (such as streaming video on demand as and when technology matures).

• Regulation of Content must be brought under uniform Arab/Regional policies.

ARWP 4 th Annual Meeting on Private Sector Issues Infrastructure & Services Investment

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Transcript of ARWP 4 th Annual Meeting on Private Sector Issues Infrastructure & Services Investment